2130 GMT: The Embassy Attack. Hossein Alizadeh, the charge d’affaires at the Iranian embassy in Finland who resigned because of the crackdown on post-election dissent, has spoken to Inside Iran about the takeover of the British Embassy:

I would never believe that the Iranian security forces who had the power to crackdown on millions of street protesters in 2009 are now incapable of stopping a few hundred people from entering the British Embassy. Therefore, I believe there was a hidden agenda to drive this action. I am pretty sure that the attackers were not students. They are the same pressure groups that oppress the opposition forces within the country.

One day after the sacking of its embassy in Tehran by pro-regime Iranian militants, Britain has evacuated all its diplomats from Iran, closed its embassy, and ordered the expulsion of all Iranian diplomats from London within 48 hours.

The decision is the latest salvo in an increasingly bitter clash between the Islamic Republic – burdened by an increasing array of sanctions over its nuclear program – and the West.

It also reflects divisions among hard-line conservatives within Iran's ruling elite, as members of the basiji ideological militia and others stormed the embassy walls, tore down and burned British flags, and carted away the cast-iron coat of arms featuring two lions. Today some conservative voices and websites praised the attack, while others condemned it as endangering national security....

Scott Lucas...suggests that Iran's actions stem from a position of weakness. He notes Iran's economic problems and sanctions, a spate of recent unexplained explosions at military and industrial facilities, and a report from the UN's nuclear watchdog agency that details past weapons-related projects, all of those prompting the "regime ... to hit back".

2055 GMT: Riffing on the Embassy Attack. Setareh Sabety, writing on Tehran Bureau has a sharp commentary after yesterday's events:

We know all about Western intervention and imperialism and we frankly prefer it to our own Islamist rulers. Call me what you want -- or worse, call me a neocon -- but I am expressing the pent-up anger of many Iranians who are fed up with the empty rhetoric of the fashionable left, which refuses to come up with a new grammar for the post-imperialist world and has no clue how to digest our post-Islamist embrace of the West.

We Iranians, hardened by revolution and war, want jobs, opportunities, and the simple freedom to do what we want with ourselves. The utopian promises of the Islamists and the anti-imperialists have both left us jaded. No ideological posturing will satiate our need to breathe the fresh air of everyday liberty.

Ofcom (British's communications regulator) has reversed its decision to revoke the broadcasting licence of Press TV...

The regulator told Press TV last month that it was minded to ban it from broadcasting in the UK after the channel aired an interview with Maziar Bahari, an imprisoned Newsweek journalist, that had been conducted under duress.

However, after hearing final submissions from the broadcaster, and amidst a crisis in bilateral relations that has seen Britain withdraw members of its diplomatic mission from its Tehran embassy after the building was stormed by protesters, Ofcom is understood to have downgraded the sanction to a fine of £100,000.

Ofcom declined to comment ahead of official announcement from the regulator later this week, and a spokesman would only say: "We have already announced that the breach of the broadcasting code merits a sanction and we will announce our finding in due course." The regulator refused to disclose whether it had liaised with the Foreign Office over the decision.

After a year-long enquiry, Ofcom ruled in May that the channel, the overseas voice of the Tehran government, was guilty of a serious breach of broadcasting standards when it broadcast comments from Bahari, who was imprisoned for four months. The journalist said the interview was made under duress and that he was forced to read from a prepared script.

2015 GMT: Tough Talk Alert (Embassy Special). What would today be without a bit of tough talk? The head of Iran's judiciary, Sadegh Larijani, puts out the rhetoric: "The Iranian people will never give way under pressure. Western governments should collect their wits."

1925 GMT: The Embassy Tit-for-Tat. Iran's Foreign Ministry, trying to recover ground after a tumultous 30 hours, has issued a careful statement, balancing discomfort with yesterday's attack on the British Embassy with criticism of London's reply.

Spokesman Ramin Mehmanparast attempted to calm the situation by declaring that Iran insists on international conventions and considers attacks on diplomatic locations as unacceptable. He said the raid on the UK Embassy was an "unexpected reaction" to British conduct towards the Islamic Republic and then declared that today's expulsion of Iranian diplomats from Britain is a "hasty action".

1839 GMT: Fraud Watch. Parliament's Economic Committee has met with the Minister of Economy, who accepted that one founder of Bank Tat --- implicated not only in the $2.6 billion bank fraud but other possible embezzlements --- owes 18.2 billion Toman (about $13.5 million) to Bank Melli.

1830 GMT: The Embassy Attack. The co-ordinated European response continues --- France has now announced the withdrawal of its ambassador from Tehran.

At this rate, the attack on the British Embassy --- assuming that the regime was not looking to use it for a showdown with Europe as well as the US and Britain --- is looking like a serious mis-calculation. Attention will turn to the European Union tomorrow, as it considers further sanctions on Tehran. Britain has now announced it will support the ban on Iranian oil imports: will other European countries follow?

1635 GMT: The Embassy Attack. Could this be the first signal of the Supreme Leader's support for Tuesday's occupation of the British Embassy? Mohammad Mohammadian, his representative in the universities, said students have proven that "they found the centre of fitna (sedition)".

1625 GMT: The Delayed Impeachment. Amidst the furour over relations with Britain, interesting to note the agreement within the establishment to set aside a domestic conflict...

Speaker of Parliament Ali Larijani said at a press conference that the impeachment of Minister of Economy Shamseddin Hosseini, which was anticipated on Monday, was deferred to avoid spreading the "huge shock" of the $2.6 billion bank fraud.

Larijani said the impeachment was discussed at the meeting with President Ahmadinejad and the head of judiciary, Sadegh Larijani, on Monday --- Ahmadinejad refused to dismiss Hosseini but the Larijanis decided to abandon impeachment to "prevent harm".

This is the second time in the last month that Larijani has presented himself as the saviour of Hosseini and, beyond him, the Government. The Speaker had publicly intervened in the Majlis to halt a move towards interrogation of Hosseini, saying the Supreme Leader did not want to jeopardise stability.

Still, the arrangement is far from secure. Larijani's ally and brother-in-law Ahmad Tavakoli, speaking to University students, called on the judiciary and Iran's Prosecutor-General to question Ahmadinejad, as the bank fraud was "hurting the public trust".

1550 GMT: The Embassy Attacks. Thanks to James Miller for updating while I was on a break. Now back to the latest on Britain and Iran....

After the Foreign Office announced the "immediate closure" of the Iranian Embassy and issued a 48-hour deadline for staff to leave Britain, Fars has pointed to Tehran's response, "The Foreign Ministry will declare soon that all UK diplomats will be expelled from Iran within hours."

Since Britain is closing its Embassy in Tehran and withdrawing all staff, that appears to be a token measure.

Meanwhile, there are a range of conflicting reactions within Iran to Tuesday's raid. Alaeddin Boroujerdi, head of Parliament's National Security Commission, threatened --- before the Foreign Office's announcement --- "The UK has to take the consequences. What happened in Tehran was minor." Compare that to the conservative websites Ayandeh Roshan, Asr-e Iran, and Alef, all of whom have now condemned the attack on the British Embassy as an act detrimental to national security.

Former Minister of Culture Mohammad-Hossein Saffar Harandi has gone farther, linking his criticism to a challenge to the Government: "Unfortunately President Ahmadinejad lost some friends and got a 'deviant current' instead....The nezam [system] should not support the raid."

And students in the Basij militia play down events with the curious explanation, "We did not destroy property of the British Embassy. The damages had happened before."

1430 GMT: Scott Lucas has just spoken to the BBC about this latest development, Britain's decision to close its embassy and withdraw all staff from Iran. He offers this summary of his points, a snap interpretation that supersedes the analysis posted this morning:

This is major step by the British --- they had a choice, as we said in the analysis this morning, of being cautious and sticking with the current plan, tougher sanctions, or of choosing to confront the regime with a step such as closing their embassies. I thought they would do the former; they chose the latter.

The practical effects of this move are significant. This further removes any possibility of discussion on the nuclear issue, as President Ahmadinejad wanted. It could affect exchanges on situations like Afghanistan. Iranian nationals, e.g., students, in Britain will also be affected.

The ball is now back in Iran's court. I doubt Tehran can take the British slap without some attempt at a reaction beyond rhetoric --- otherwise the regime looks weak --- but I am at a loss to see what the regime can do to make Britain "pay" for its response.

Can the tension be eased? Now watch the relationship between Tehran and the European Union, the prime channel for nuclear discussions over the last few years. If the EU adopts more sanctions tomorrow --- including a cut-off of oil imports from Iran --- then that is another challenge to Iran. Conversely, if the Islamic Republic wants to keep open some way back, it will avoid a breaking of links with both the EU and individual countries in Europe.

A key "wild card" in this increasingly difficult game --- eyes should be on Turkey as a possible broker for a diplomatic calming of waters. Ankara is one of the few countries with good relations with Tehran, with European countries, and with Washington. In the past, it has been a likely arbitrator for a settlement on the nuclear issue, as well as on other questions regarding Iran's relations with the other countries in the Middle East. Will Turkey now take on this emergency role?

1355 GMT: The Embassy Attack. Major news out of London --- the British Foreign Secretary, William Hague, has just announced that the Iranian Embassy must "immediately" shut and all personnel must leave the United Kingdom.

Hague also said that all staff of the British Embassy in Iran would be departing, not just some as the Foreign Office had reported earlier. The Embassy will be closed.

We will have a snap analysis within the next hour.

1215 GMT: The Embassy Attack. An EA reader injects a note of caution on our reports of involvement of regime officials in the demonstration at the British Embassy (see 0625 and 0830 GMT):

Although the first picture is definitely Hossein Ghadiani, the head of the Basij Students [Organization], I am not sure if the second picture is that of [Quds Force officer] Karim Jalali. I doubt if such a senior ranking Al-Quds commander would take part in such an operation with media coverage. But I may be wrong.

Norway has closed its embassy in Tehran because of security concerns, although the four or five diplomatic staff have not been evacuated.

1119 GMT: Claim of the Day. The pro-Ahmadinejad blog Maktabe Ma (Our School of Thought) says the recent attempt to detain Presidential advisor Ali Akbar Javanfekr was preparation for a coup against the Government.

1115 GMT: Parliament v. President. Speaker of Parliament Ali Larijani has refused to back the Government's insistence on a bill reducing the tax on $3 billion of imported goods from Free Trade zones.

1105 GMT: Shutting Down the Baha'is. HRANA claims that local officials in the cities of Kerman and Rafsanjan have closed premises belonging to members of the Baha'i faith, given them two months' notice to shut, or denied the renewal of operating licences.

1100 GMT: Economy Watch. Khabar Online reports that the purchasing power of support payments for subsidy cuts has dropped by 23% because of rising food prices this year.

Khalil Saeedi, the former deputy of Iran's Statistics Centre, has asserted that the rates of unemployment during the Ahmadinejad Government were "corrected" on the order of 1st Vice President Mohammad Reza Rahimi.

0830 GMT: The Embassy Attack. Digarban identifies another participant in Tuesday's "spontaneous" protests at the British Embassy --- Hossein Qadyani, the head of the Basij Students Organisation, one of the Revolutionary Guards' most important branches operating in universities:

a name="0828">0828 GMT: The Embassy Attack. Another interesting ripple in regime reaction to Tuesday's events --- Alef, the outlet of key MP Ahmad Tavakoli, has condemned the storming of the British Embassy.

0820 GMT: The British React. Pulling back on our opening news this morning (see 0615 GMT)....

The British Foreign Office says "some staff" --- not all --- are leaving Tehran "for their own safety". It will not confirm if there is to be a complete evacuation of diplomats.

0725 GMT: After the Embassy Attack. And now the follow-up from key actors within the regime....

As Fars reports that 12 protesters were arrested at the Qolhak Garden "secondary building" of the Embassy, where six employees were briefly held by the occupiers --- a Basij student site says 15 occupiers were detained --- both the Iran Police Chief, Esmail Ahmadi Moghaddam, and his deputy, Ahmad Reza Radan, have given re-assurances that the situation will be eased. Ahmadi Moghaddam reportedly told the British Ambassador, "Don't worry about your security," while Radan said the arrested attackers will be prosecuted.

Khabar Online, connected with Speaker of Parliament Ali Larijani, maintains that British officials expressed their gratitude to the two men.

And Larijani has made a direct intervention, calling for calm and restoration of law & order. At the same time, he did not criticise the protesters --- instead he turned on Britain and the US for their public statements condemning the raid and defended Parliament's resolution, passed on Sunday with Larijani's warning that there was "more to come", downgrading relations with London.

0715 GMT: The Embassy Attack. Digarbansummarises a declaration from the occupiers of the British Embassy on Tuesday --- it is worth noting for the attempted public detachment of the protesters from the regime: "Storming the British Embassy is being done by revolutionary students and such an action has not been done by the order of any official organization."

And it is also worth noting for its warning that more "spontaneous" action may follow: "Since the students have spontaneously stormed the British Embassy, they will continue their path based on their own revolutionary thought".

The occupiers, calling for a complete break in UK-Iran relations, said the attack was "now being done with 33-year delay...The same action as was done with America on November 4, 1979, now has to be done with Britain; and the students wait for the support of all Iranian people."

That was a mistake. Although there were certainly students among the protesters, there is no evidence that the demonstration was student-led or, as Fars later tried to frame the attack, "independent" of the regime.

I should have heeded an entry in our Tuesday LiveBlog, hours before the protest:

Two days before a mass gathering of Basij students, Fars has declared that there is no difference between the British Embassy and the "Nest of Spies", the US Embassy that was taken over by young activists in 1979.

The "Avengers of Scientific Martyrs" have vowed to mark the one-year anniversary of the death of scientist Majid Shahriari with a demonstration in front of the British Embassy today.

That media campaign, the sudden appearance of a new group, and the apparent role of elements such as the Basij militia should have later pointed me towards the probability that the organisers of the protest were in contact with --- if not co-operation --- authorities within the regime about the extent of the operation, including the storming of the Embassy. And it should have not warned me that those organisers were not necessarily "students".

0625 GMT: Tuesday's Attack. A more than incidental footnote on the storming of the British Embassy --- sources in Iran have identified this "student" protester as Karim Jalali, a member of the Quds Force of the Revolutionary Guard:

0615 GMT: As we begin this morning, Reuters reports on the consequence of the attack by protesters on the British Embassy on Tuesday --- London is withdrawing all diplomatic staff.

The step is not a break in relations, but it effectively means that Britain will be handing all conduct of its affairs in Tehran to another country, as the US does through the Swiss Embassy.

We will be looking for further measures that points towards a suspension of Western "engagement" with Tehran --- affecting not only the prospect of nuclear talks but discussions on Afghanistan and the Middle East and the welfare of nationals, such as students, in each other's countries. Will Iran withdraw its staff from Britain? And will European countries such as France and Germany also reduce the level of their representation in Tehran?

The BBC reports, from a source in Tehran, that the situation outside the UK Embassy is calm this morning, with police lined up outside the compound.